tv Squawk Box CNBC April 28, 2014 6:00am-9:01am EDT
welcome to "squawk box" on cnbc. i'm becky quick along with joe kernan and andrew ross-sorkin. and we have a special guest with us for the entire half hour, ceo muhammad alerian. but first we have a big week for the markets with another mega round of reports, a fed meeting and a big economic number. the fed kicks off a meeting tomorrow with new decision on rates. anew language about the taper coming on wednesday. and the ap report for april released at 8:18 eastern time followed up on 8:30 for more on spending and auto sales leading up to the big number. and that is friday's employment report. as for earnings, we have another full calendar for you. merck, e-bay, twitter, chevron, mastercard. all on the list this week, but before we get to that, we'll go
to joe with breaking news. okay, becky. nbc unioner in value parent comcast struck deals with charter communications to invest 3.9 million subscribers after the deal to buy time warner cable. they just announced transactions transfer 1.4 million time warner cable customers directly to charter for cash. comcast, meanwhile, will swap about 1.6 million of its own customers to charter in return for an equal number of charter subscribers. comcast says that the move will improve the geographic presence of both companies and fill in some footprints in areas where both companies wanted to be more efficient. and comcast, while all this is happening, is going to form a new independent publicly traded company being called spinco that
will serve approximately 2.5 million existing comcast customers. when all the deals are concluded, comcast will hold no ownership in spinco or charter and will have no role in managing spinco. and comcast is hoping the move will convince regulators of the deal, but there's other things it does for the company as well. the company says that the value of all the transactions, put them together, that's $20 billion with charters paying comcast, and includes a spinoff. andrew and becky, a lot of the debt that the company is incuring and buying, time warner will be putting into spinco and we'll look at what the company is left with after all is said and done with the similar amount of debt it had. >> the reports are that comcast and time warner charter would be able to shore up some of the areas they want to build regional powerhouses for, they would be trading back and forth at the end of the day. comcast has a lower market share or about the same market share
back in 2008. >> they are trying to get under 30 million, which was the whole point of the exercise. because the fcc had a rule that said you couldn't go over this. then that rule was actually overturned by the courts. and then comcast said, we will voluntarily participate under the rule that doesn't exist anyway just to show our love for those regulations. but that's sort of what this is all about. >> this is just as a comcast shareholder. i would also own part of the new charter because they would be spinning the stock out to the shareholders. >> the one question i couldn't figure out from the release and maybe you know the answer, does this transaction go forward if the larger comcast/time warner cable deal is blocked. my understanding is it is solely based on the idea that time warner goes through. and it won't happen otherwise. >> right. >> if you read it very carefully, at least initially,
it tries to, i thought, the suggestion was we are going off to do this. >> it was to prove to regulators we will do what we told you to do all along and make sure we stay below the threshholds. >> in what i would imagine is a very smart tax advantage way by our friend who knows how to do this. in cable deals, if you want to figure out what is going on, look at the text implication. john malone, whomever, look at how it is working and -- where were you, by the way? i know where you said you were, what do you got? i know where you said you were, but who is this? look at this. get close right here. >> the pope. >> no, right here. who is that? >> you know, i was hooting and hollering. >> look at the eyebrows. >> i was in rome. >> look at the eyebrows, andrew. >> we have a guest who also has eyebrows. >> look at the wrist, it has
your thing on. what is that, your jawbone? is that not you? and you are wearing a roman collar. >> i'm wearing my roman collar. >> the eyebrow -- i have never seen you that excited about something. >> a jewish guy in a roman collar. >> i saw that yesterday and said, andrew, he doesn't tell us a lot, becky, but is that -- >> yeah, that would catch me by surprise. >> look closely. is that just a guy that looks like you? >> not really, but i'll take it. i understand. >> you were not in rome, were you? >> when in rome -- >> put on the collar. >> we were in vacation in mexico. >> i never gave you up on that. >> we were in mexico. we had a great time. we had never been before and went to cabo as they say. >> and to go there, it was like in that movie where the guy has to provide financials to go to the restaurant. remember steve martin in l.a.? you had to show you were a .001
percenter, did you not? >> i don't know, just a credit card. >> but they had to check. >> they had to check that it was going to clear. and we know that it did. >> we'll tell you about another deal this morning. this deal is talking about taxes and being driven by taxes. pfizer now going after astrazeneca in what could be the industry's largest acquisition ever. we're talking about $100 billion. pfizer seeking to renew discussions after offering nearly $100 billion to buy astrazeneca. pfizer approached the company back in january. now they say the proposal is significantly undervaluing the company. the ad visors are told to take no action on pfizer's business. take a look at the shares right now as you see them down $79 a share. their bid by the way is $46.70. that's in pounds. the date to watch on all this is may 26th. pfizer either know has to show up with an offer or not. under the u.k. rules, they have
to come out to announce what they were doing. when i say being driven in part by taxes, what's happening here is pfizer has a lot of money overseas and doesn't want to bring the money back. and that's in large part what is driving them to want to buy astrazeneca. also they note this morning in their statement, which is fascinating, the way they will structure the deal is they will leave astrazeneca and part of the deal structurally in the u.k. and it sounds like they are going to run a lot of the company through the u.k. so they know more on what they are doing. >> not with that, but with general electric and corporate taxation and striving money -- we already know, see, that's why i took offense with the article you wrote about corporate taxation. you gave the blend of twin right after the financial crisis, so everybody had writeoffs.
and you also, when it is 35%, people deliberately leave stuff over there, which lowers the blended rate, but the run it is so low is because of the taxation. did the editor assign you or was it your editor? >> these are my true feelings. >> corporations don't get a lot of write-offs. >> i know you don't think -- >> you think corporations are taxed way too low here in the u.s. that's basically what is the thrust of your peace. >> there are a number of loopholes that should be captured for corporations here. >> the tom one is being interested. i don't know if we have shown the stock, but you can see that trading slightly up, 31.02 is
the number. and germany's british consumer giant ricket is said to be among the final contenders. merck's cop summer unit is best known for coppertoen sunscreen and claritin. >> for rickets. >> for rickets? >> yeah. >> thank you. i know where you are going with that. >> i'm not going anywhere. i missed you. i i am just glad you are here. i'm glad you are not in the seminary here, which would be a shocker. anyway, that was a big day. we have another big deal. this is a european situation. >> you go up against the -- over here we might be a little bit nationalistic about some of our companies, like i didn't want the bacon. and bacon is like $12 a pound now. you don't have to say i was right about that, but we didn't
want to sell smith view. nothing happens with the final say. >> it's always been that way in france. >> i know. i'm not surprised. >> this is just like welcome to france, welcome to the world. >> they didn't want to sell yogurt. now this is the crown jewel of the industrial -- do they have anything industrial in france at this point. the french president meeting with ge chief ml today. to discuss the company's power intentions to buy the french government. they are seeking to put the brakes on the $12 million plan and wants to look at alternatives. it will still be a german french european hands. and they would agree to not -- if you can't do any of the r
rationalization. amaud montbourg is ordering the ousted ceo to the ministry immediately to plain why they were negotiating without the government's knowledge. i am sure that when the ceo was thinking of doing this, they thought, we have to talk about the wind and rain. >> i have more to say to you. >> no, it's about "the new york times." now they are performing an asset deal to $14 billion and to merge those to create more companies,
one more in energy and one more transportion. take a look at alstom in europe. and ge traded -- >> up almost 11%? >> i will tell you what i saw over the weekend. was the absolute reflect to this tom petty guy. when crude man came on here, he said what we were talking about were zombie ideas because he wanted to grab the title quickly. going back to marxist. i saw elizabeth warren has got to run for president in "the new york times." then i saw a monkey on the cover of "the new york times" magazine. because a lawyer is representing
the mown key and suing him against the person's owner. >> it was a great story. >> but "the new york times" said that -- that this monkey is suing his owner. >> you read the whole thing? >> no, but no one is laughing at it. so i was laughing when i saw it, but then "the new york times" told me i can't laugh. so i stopped laughing at it. >> i just did it for animal cru cruelty. we are joined this morning by one of our esteem ed ceos. he's the chief economic adviser and member of the international committee. wonder to feel have you on the set. >> there's a lot to talk about. >> we have not gotten a chance to talk to you since you left
pimco. why did you leave? >> very simple. after 14 years there, it was time to do something different and to step back and have a different perspective. i went from having a full-time job to have a serious of personal decisions. >> it didn't have anything to do with bill gross and clashes and all the things read about. >> there's been so much written about pimco. second of all, they are full of talent and incredible investors. and it was a wonderful opportunity to be there. i'm doing a lot of different things and learning so much more. i stepped back and now have a much broader perspective of things. i don't know, the weather leads the story. >> when it comes to bill gross, did you clash?
>> did you curse and use the s-word? >> no, i don't want to talk about personal action with anybody. as you know, i'm a pretty private person, but i look back with nothing but incredible admiration and feeling like an almost privilege. >> i think i'm going top ask you but i don't know. >> i don't think he's allowed to say anything, but he has to say it this way. i think what is -- the bottom says, i'm running in a dress. >> i understand that. >> can you confirm you were making $100 million a year to me? >> no, i can confirm that i did not make $100 million a year.
>> that's way low. >> there's so much going on. i have another mat question on this. and i know that you love them and you may. the larger question going forward for pimco was bill was on one side and people thought he was a great investor, but they needed me to manage the place or to deal with people because you obviously have more -- i don't know if you have more or not, but there are -- do they need more people in that role? >> they have more people in the role. the secret of pimco is if you go beyond, who is on the bench, morning star had a wonderful comment when scott simon left a few years ago. he used to be the head of the mortgage desk. if you look at scott and he we want anywhere else, he would have been the star investor because he was at pimco and
among a team full of talent. >> can you speak to this? the cover of "business week" a month ago had a picture of bill gross with "am i a jerk" on the cover, what did you think of the piece? >> i didn't read the piece fully. i understand the reporter spent quite a bit of time with bill. then most important thing to remember is he's one of the best investors. that's what matters ultimately for people. >> 96% of similar funds beat him. >> do you know any long-term investors that doesn't go through a hard time? >> in the last five years, he's only beat 56%. he's in the top half. the cincinnati reds they lost to. >> they have the most exciting player in baseball out in center
field. >> they are living in '14. >> the mets are going better that the reds, which is -- i know. fair is fair, would you look at the bond market and what the fed is doing? >> so you guys have not develop through all the headlines today in this deal. there's sanctions coming up. basically what they explained to you is why we are on the tug of war. >> tug of war when it comes to stocks. >> yeah. if you put them all together, but the company is increasingly going more comfortable from -- central banks have been enormously supportive. put that in an economy improving and you have all the pushing stocks higher. however, we did not talk about sanctions. ukraine is serious.
if sanctions go from targeting individuals, which led the country to targeting sectors, you can pick your own section and the stockholders are not going to like that. and we have a fed meeting that is coming up that won't surprise in terms of actions but fundamental transactions going on. and they are increasing uncertainty. so this is a really interesting time and investors have to navigate the tower war. >> i think it was your paper, maybe in the journal, but putin's investments are all presumably under the commodities firm, i forget the name, governor bruno or something, he may be worth $90 billion. and the idea is when we try to mess with him individually, that would be perceived by them as going -- actually, the word nuclear would be used. so you think we go after putin
himself? >> we should. >> first of all, i don't think targeting individuals is going to help. if you want to -- >> putin is not just any one individual. >> but if you want to get there, you need to have energy and finance. but there's a reason so many are trading with russia. 40% of russian traders trade with europe. so if we move this to russia, russia will retal -- >> we live in the neighborhood, the global neighborhood. and that's why this decision is so hard because what is clear politically is not consistent economically. all right. we are going to take a break, and when we come back, i want to
ask you about -- will you say new normal for me? >> new normal. the boys from pepco think they are still there, and am i reading this? go back down. >> we'll take a quick break. when we come back, we'll have much more from muhammad alerian. much more right after the break. ♪ "first day of my life" by bright eyes ♪
♪ game of thrones continues. doesn't that sound like -- what is that? >> rome? >> the guy at the beginning, sounds just like him. do you watch? >> i do. >> at the beginning, all the things moving around. we'll go back to our special guest, former pimco cio and the chief economic adviser and member of the international executive committee. i did not see it last night, so let's not talk about it. what year was that when you coined the term, new normal? >> we coined that in 2009. >> 2009. and i think at the time you said five years, didn't you? >> we said three to five years. and it was both a cyclical for verizon next year. and the second horizon in the
next three to five years, we are likely to see up usually low growth, persistently high employment. >> and that basically came through. and at the time you said it, it wasn't due to anything the government was doing, it was due to the ryan heart pro-golf. and that caused you the make the call, right? >> the issue was this was deleveraging that you used to do. >> now you just said some companies are switching to offense and not defense. and the guy who took some of your people at pimco saying we are coming out of the new normal in cop that's, and you say you are still in the new normal. >> if you look over the next three to five years, you come into this junction. but it will be nice to hand off
to high growth or we grow. i think what's happening right now and it's important to differentiate, on a cyclical basis, america looks better and european looks better. but the witness to believe that global fwroet is going to pick up, as long as new jersey opens it full and doesn't contaminate. we have three problems that we have not addressed. the fed has more time. it's about time for the economy to heal and the corporate sector has healed and the housing market is healing. so to me it's a country as to what the area will look like in the next fee to five years. >> you were wrong about the stock market. that was not a new normal, it
doubled or did much better that you thought. you attributed it to another famous term that the wedge was between the common and asset prices. now essentials -- is the wedge being removed? does the market have a day of reckoning? >> here's what we know. we know that the fed is committed, committed to continue to support the asset markets. not because they like the asset markets, but that's the only way to support an economy. i expect to come this week they will reduce qe by $10 billion. it will go from 55 to 45, and exit qe by the end of the year. you will keep interest rates at ze zero. we are not just targeting the whole employment rate but the market. and we worry about inflation
being -- i think it is consensus. thi as we eye the transition from the regime that was two-based to a regime protective basis. we were told exactly what they were going to do. now we are told what they are going to do is conditional them the and the fed is targeting different things. >> so did you watch the whole thing last week? >> yes. i watch it every morning. >> you watch cnbc but appear on the competitors and watch us, is that what i'm getting?
>> maybe i'm figured a florida perspective for life? >> you can't say no and watch us, though, so they send this out to everybody. and what good is it when you lap all over there. why do you read the new york times? >> you know why. he needs to read the enemy. >> so so the economy in your view rising to asset prices where the fed can hand it off? so short, fundamentals are fun
in of themselves. so that in itself, we can have a long discussion, but i think the key issue again is less of a cyclical site. i'm going to keep raising this cyclical side, but it remains fuzzy for me. >> you keep saying the stock market hasn't factored in what you think the bond market has to this point. so there could be a scare, a spoof in the market when the fed actually is clearer about -- >> becky, if i had come in five months ago and fold you there was going to be a flat anything of the treasury. in the long end, the wheels will come off. what does that mean for the spot market? a completely different prediction. we still have to recognize what's happening to the stock
market. >> when i see here that i'm realizing, the more i look into it, g, e's move and some of the moves into europe, now everybody wants this company. but that says something, doesn't it? about us pretty much counting on, that could be a multispeed universe, which you always talk about. they could start doing as well as us? >> i mentioned the u.s. is going to grow at about 3%. i mentioned europe, which now looks to go one and get this far, which is big in europe. and china stabilizes seven to of these. >> general electric says this is not up usual at all and knew this was going to happen. they knew this and in ten years have done this deal, du
approaches 7,000 employees in france without this deal. and that's more siemens or alstom. >> what do you think of the whole thomas piscetti thing? >> i think i have a good idea. >> where do you stand on all this? >> i'm going to get joe unexcited. i think this is a serious work based on data. >> so was the original capital. it raises fundamental questions like wealth, income and opportunities. and the issue with what people assign with this is what undermines economic growth.
>> that's the other thing i read in "the new york times" over the weekend. they didn't see this coming either. now what is coming? do you rebel rouse or try to get this started? some -- this is the street theater of occupy wall street. it is now in the pseudo electrodes. he's a 42 car park ed -- >> you can forget about taxation, but the underlying numbers are interesting to talk about and to possibly address. i don't know how you want to address them, but it's at least an issue. >> haven't you seen this movie before? there have been regions of the
world that have tried this. did you see what finally happened? only one system. it's only one system that eventually raises everyone and you can argue around the actions. the bank is wonderful to be at. >> have you bought it yet? >> i have bought the book but have not read it. like everybody else. >> you will read three pages and then claim to read it. >> thank you. great seeing you. hope you come back soon. >> we hope to see you more often. coming up, monday morning strategy session with mark grant. we'll talk to him. and the buzz of the weekend, we'll talk about this. the los angeles clippers' opener donald sterling racist comment sending a shockwave through the nba, but what can the league do about it? we'll look at it in this morning's executive edge. we are back in just a moment. ♪
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good morning. welcome back to "squawk box" here on cnbc. i'm joe kernan along with becky quick and andrew ross-sorkin. comcast discussed a deal with charter communications that it hopes will convince regulators to approve the $45 billion takeover of time warner cable. not sure that's the rational behind the deal with a lot happening here. the transaction is worth about $20 billion all in. and it involves divesting subscribers to charter or selling them to charter for quite a bit of cash.
$7 billion in cash. a new independent publicly trading company, which will be called spinco, and a subscriber swap with charter. there are only tax advantage reasons and reasons to lower comcast debt to back to where it was before the time warmer deal was announced. and also so use some of the cash to -- >> these guys were joining us originally and buy back stock with the mark they like. astro zeneca is a stock to watch as pfizer considers its options after having two takeover bids rejected. s a that zeneaccides a tra zene confident. and a recovery could be stalling. the national association of realtors is out with its pending home sales report.
for march at 10:00 eastern, the measure of home sale contracts signed but not closed fell .80% in january. last week when you were out, we were at 14-year lows in mortgage rates. but it was also refinancing more than anything. and treasury yields have been on the decline, but then they went back up. i didn't looked at them today. are we below $2.70 again? joining us to discuss his case for yields going even lower is mark brandt, managing director at southwest securities. we have take an couple european victory laps this morning. everything is fine over there now. >> of course everything is, john, they'll tell us and have told us for the interest rates there in buying up companies? you don't do that if you think the place is broke so the. >> no, but what's happened in
europe is they are much more aggressive than the fed. the economy is certainly not better, but what it is is that the ecb has lent money at a quarter of 1% to the european banks and prodded them, encouraged them, there are a variety of words you can use. and they have lowered interest rates of the country's in europe so that slovakia, belgium and spain have lowered sovereign dealt yields in the united states of america. >> that is pretty amazing. why do you think that yields are not going to rise with the fed presumably at some point becoming less easy and less accommodative. >> i think they are going to stay very accommodative. the fact that they rending the taper that -- if you take the
entire u.s. bond market, which is about $38 trillion, the fed op owns 11% of it. if you x out the corporate bond market, they own 14% of the bond market. all they have to do is shift around their maturities of what is in the market already and lower the united states interest rat rates. >> the fed is still going to be in here, and the reason the rates go lower in the u.s. is because the fed is still in or economic growth is still not up to par. >> it's nothing to do with economic growth, which is running at 2.4%. up nation, 1.5%. and totally has to do with the fed. they are going to, in my opinion, follow the european strategy, which has been up credibly successful.
1.6 trillion in bonds and u.s. treasuries with maturities of ten years or less. i think they are going to expend the maturities on those and force interest rates or lower. it's good for the consumers. >> why do you have a beef with it? sounds like it is good for everybody. >> i don't have a beef with it. >> oh, you're happy. no day of reckoning coming from any of this either? >> no, i don't believe there's any data reckoning over some longer period of time they might cut back, but that's not going to happen. >> is inflation ever going to get back to the fed's target range here or is that going to stay low? >> i think it also stays very low until the interest rates are pushed, dan. say the 2.25%. and then i think you're going to have some concern, but i think
we've got a ways to go to give you this, our ten your is 2.6%. the french tenure in an economy clearly not as healthy as the united states is 1.97%. all we have to do is go to that level and we have picked up six more points in appreciation in the ten-year treasury. >> wow. i don't know anyone else bullish on bonds, but i like it. thank you, mark. >> you're welcome, joe. >> see you later. when we return, we have much more on the deals of the day, including comcast subscriber shuffle. rich greenfield will join us at the end of the hour. but first, here's a check on the european markets. e
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welcome back. the u.s. equity futures if you take look at this hour have indicated to be higher. the dow futures are up by 72 points above fair value. s&p futures are up by just over 7 points. and the nasdaq is up by 15. we have a big week. we have a big week this week with the fed with the two-day meeting. off jobs report coming up on friday and a lot of economic numbers in between. when we return, we'll have more with our executive edge. some of the comments made over the weekend with the nba. we'll be right back. honestly, i'm pouring everything i have into this place.
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>> a tough start for silver. he has to figure out what to do. >> you know the guy who just -- i defer to him. that's kevin johnson. mayor of sacramento since 2008. he was also working with the nba players to do something else. so they're going to make him more involved with this. he said once the investigation is done we have to find out what we can do and come down hard. that was painful for the players. what do the owners have without the players? he own the team without any players. >> you can't suspend them. >> according to "sports illustrated", the nba constitution, which is confidential, they can sell without an owner's consent. but there is no language to sell a team because of language orem bearsing behavior.
it was traditionally meant to be used when circumstances are finances. so the team is in dire straits financially. they say, look, you guys are in too much trouble to do it. the question is whether you can find a way to force the sale and sterling can come back and sue the nba. it's very complicated. >> it sounds bad. it's a bad story. because the owners, except for michael jordan are mostly white. the majority of players are african-american. the whole notion of this guy is bad. >> marge schott was suspended. winters. does that just look like you're doing something and you're not? >> it's not going to go away with a suspension. plus, there's the notion that
the nba sort of looked the other way with previous incidents. they're not going to honor him anymore. >> what do you fine him? he's worth 1.9 billion bucks. he's 80 years ago. thank you. i'll pay that tip. >> see how he made his money? personal injury attorney. enough said right there. >> i think i would defend -- >> morally have to look up how do i feel. >> i say within three years the company is sold. >> it takes this guy to defend the personal injury attorney. steve bomber. >> he's wanted to buy it. >> he's a motivator too. >> he could be running around the team. >> we have deals, deals, and more deals.
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s&p up by 7.5. nasdaq by 15. comcast struck a deal that would divest 3.9 million subscribers. much more in a minute. astrazeneca stock is up 16%. pfizer is considering options after two bids to buy the british drug maker were rejected. the $100 billion offer is significantly undervalues the company. it says it is confident in its strategy as an independent company. it is telling shareholders not to go after either of these bids. microsoft is set to unveil plans to create original television shows for xbox.
"the wall street journal" reports an announcement is expected this week. the company wants to broaden the appeal beyond just video game. >> everybody wants to be in the tv business. french president hollande is meeting with jeff emil today. the deal is now up in the air since siemens is entering the picture. >> the meeting lasted for about an hour this morning. g.e. ceo jeff immelt meeting with french president hollande for about an hour. also steve boles from g.e. the meeting was friendly and productive. the meeting comes after siemens made a competing bid and amid a growing course of discontent.
a person close to g.e. says they have to plans to get into a bidding war. it maintains the u.s. company's bid reported around $12 billion is superior to siemens. siemens has offered to swap its transportation business plus cash in exchange for the power business in a deal reported valued at $14 billion. in a statement released earlier, they will make further announcements on wednesday. the 175-year-old power business accounts for 70% of its revenue. the remainder makes high-speed trains. if the deal goes through, sources say it will be a significant step in getting the company to its goal of having 70% of its earnings from its industrial businesses and 30% from its financial arm. it would be the largest acquisition the firm has made under immelt who made 50 sense
he took over in 2001. it is not a complete surprise s. still within the last weekend, an earlier bid was rejected. g.e. is no stranger to france. 10,000 of 300,000 of its employees work there. it's not known if any employees would be cut if g.e. wins the bid. >> what does g.e. have to give? meaning hollande is standing there. he will have to give some type of concession. >> the concerns, and i don't know this from anyone. but the concerns are job security for astom's workers. there are concerns about maintain something kind of headquarters in france, having it run from there. and concerns about a national security because of the nuclear business as well.
>> g.e. points out it's got more employees in france. >> which i think has 7,000. >> more than siemens. and a joint venture in france already, saffron. "the dialogue was open, friendly and productive," which you said. our successful track record of investing in france and our long-term commitment to the country. we have understand and value his perspective and we are committed to work together. i like arneault's title. he is the minister of -- >> economic minister. >> minister of economy, industrial renewal, and the digital economy. just to show you how important.
was it his idea no e-mails after 4:00 or weekends? >> i don't know. i will not comment on that. >> you could not live without e-mails after 4:00. >> on vacation, i couldn't -- >> who are you kidding? you like that idea. what would you do? >> i don't know what i would do. >> he would be on the phone. that's all. >> there's no way. so i don't know what to think about this. did they like the germans better than us? >> they may. the history is interesting. they rejected an offer from siemens before. but they said it would be a european industrial type. it may look more appealing now than it did. >>. >> the ministry? >> there were liberators in history. occupiers. maybe i'm confused. >> you should call hollande.
>> we should have him on the show. that would be an interview. >> if we have any updates, of course we'll let you know. siemens is meeting with preside president hollande. >> does money talk? >> remember, allstam approached g.e. on this. they see something that works. >> did you see on friday? >> it would be a good deal. it gets them closer to that 70/30 split they're working for. it would be a big step in immelt's long-term plan for this company. >> we spent a lot of time on g.e. we got a comcast deal. you are out of here. they don't even own half anymore. >> but you still own their stock, i bet. in your retirement plan. >> it's so large. it's a blind trust i think. comcast striking $20 billion in
deals with charter communications that will see it divest $3.9 million. rich greenfield media and tech analyst. when you read it, did you immediately understand it exactly? did you have to make a few phone calls? you need to tell us everything that is important about this. >> well, i say first off anything that involves john malone is always complicated. the key thing is about minimizing taxes. he is the driving force behind charter. so this transportation is necessarily complicated. but i think the most important thing for your viewers to understand is that comcast, as part of this transaction, is maintaining the most important market it is acquiring from time warner cable, namely, new york and l.a. the stuff that comcast really wanted when it went to acquire
time warner cable, it is keeping assets and not selling them and spinning them off. they will have assets in michigan, minnesota, indiana, alabama, eastern tennessee, kentucky, wisconsin. they are not the key markets they cared about. they want to control the major cities in the united states. >> do you center a good feel for what spin co.does, rich? >> $2.5 million assets. publicly traded. we have lost some of the smaller cable operators. >> they want to offload a lot of the comcast debt onto this company, right? how does it work? >> it actually seems like it will be relatively similarly leveraged the way a charter is leveraged. this will be around five-times leverage. this seems like a reasonable leverage for a smaller cable operator. again, the exact level of clustering and how good the
systems are they are putting in, it's a little hard to tell from slide 10 of the slide deck. what is clear, while they're in, you know, meaningful cities, none are in major markets. i think this all speaks to why comcast had to come in and buy time warner cable, steal it from charter. comcast wanted to be in control of what assets it kept and what assets it didn't keep from time warner cable. i'm sure if it was charter led and was thinking about spinning assets off to reduce debt, you would never see it give new york and l.a. >> rich, a larger issue. does this put it past the goal line? >> actually, i don't really understand why the government would care whether comcast was 33 million subscribers or 29 million subscribers at the end of the day. they don't actually compete against each other.
time warner cable or comcast in eastern tennessee, there's no change in the level of competition. that being said, given all the focus on its broadband prowess, at least until we see greater wireless competition. it was allowed to merge with t-mobile or we saw it expand its fiber footprint. i think it will help the speed of this transaction. but we never thought approval was at risk. >> rich, on approval, netflix came out against it last week. what does that mean? to the extent that the contract between hbo and amazon is unique and new, does that say anything or speak to the larger issues about broadband over the top? >> well, i think netflix has been pretty clear. the call we co-moderated last week. this is not a transaction they like. they comcast broadband power is
too large. they had no choice but to do a deal with comcast given their side. i think doing a deal with comcast is actually going to force isp like verizon and at&t to spend their own capital to upgrade their own systems. i don't think they will allow comcast to have a better performance. while reed is against the transaction, the whole idea is very complex issues. as the fcc said, these are not the same issues at net neutrality. they are different issues. on your other point of hbo and amazon, i think the reality is what you're seeing is the media companies, the consent owners i should say do not see amazon as an actual branded content competitor where they do see netflix. it is a media brand to hbo. i think you will end up seeing
amazon being an interested acquirer, someone of content. at the end of the day, i don't think the media companies at least yet worry that amazon threatened -- >> rich, do you think this number, 1.4 million subs that charter is giving comcast $7.3 billion in cash? is that in there? >> i think that number -- actually, there's a slide that lays out all of this where it talks about the actual -- >> where is that for a price? these are nonessential subs. >> literally on slide number five, charter acquires 1.4 million customers, $7.3 billion in cash. >> wow. okay. thank you, rich. >> no problem. >> it is never too early to talk about decision 2016. joining us this morning, ben white, politco's chief financial correspondent also known as -- >> morning. >> do you want to be called that
anymore? or not after last week's week peace? >> i'll just go with ben. >> you have a big piece this morning talking about how you interviewed a lot of people on wall street about how they look at 2016 and how the dark little secret is that many of them may want hillary. what's going on? >> they want somebody like jeb bush, chris christie, paul ryan, if they can get him. somebody who is not of the populus wing of the republican party that is rising right now. you have rand paul, ted cruz out there, vocally slamming wall street, the bank, special interests. wall street doesn't like that obviously. thinks they are being unfairly targeted. doesn't want to see it from republicans. jeb doesn't run. paul ryan doesn't run. and one of the governors doesn't emerge as a moderate candidate. some on the fence would say, yeah, hillary is great. she's not anti-wall street.
others more conservative would hold their noses and say if they were to get the nomination, which is a long way from here to there. one of the guys beth the nomination. >> wouldn't you think both republicans and potentially hillary would have to know the populus. meaning they are laying low. they are not playing the anti-wall street card. >> for hillary, it depends on the primary. if she faces a significant challenge from the left. it doesn't look like it will be elizabeth warren. she said up and down she's not going to run. >> warren says hillary run. >> so it depends. if she gets challenged from the left, she will have to be outspoken, regulatory reform. and the republicans probably will too to win nationally. >> that's the point i want to make. i don't know how long -- we had for 20 years where the progressives would take over the world. president obama was re-elected.
do you see how hard it was to get a 3.5%, 4% increase on the high end. vichetti is talking about a wealth tax. the idea what people need to move more populus, is it possible there are maybe parts of this country that aren't quite as -- you know on this little island here in manhattan. did you see what happened in georgia? do you see what's happening in other places. >> broadening out. >> yeah. are you sure paul and cruz are anti-capitalism. >> i think they know good politics when they see it and know it captures the tea party and primary vote stories talk that way. paul is on record saying he is not in favor of con fisk tore
tax rates. >> where was hillary? she gave the speech. it was only in the last year. >> goldman? >> yeah. it was a society tal thing. >> she talks about the broad societyal responsibility. wall street hears that, thank god. somebody said it. this is what we believe. we're not as evil as everybody says. >>. >> is this here to stay or flash in the pan? >> here to say in the direction of our capitalist society is and whether it awards the weighty too much. i don't think 80%, that will turn people off. democrats who align too closely are at risk as they talk about the middle encloses khras not
doing well. there's a risk about getting too far down the road. >> listen closely. >> she is the democratic nominee. she doesn't lie. she tells the truth. >> how about that. >> hillary 2016. >> how about that? >> we do have a big week or earnings, and the fed. up next, the exclusive results of the cnbc fed survey. plus, we will reveal another list of 25 rebels, icons and leaders. leaders.
the fed kicks off a two-day meeting tomorrow. steve? >> good morning, becky. what we find in our survey, economists, strategists, and money managers, wall street turned slightly more hawkish. 95% expect to taper at the meeting this week. 85% expect tapering at all meetings for the rest of the year. now let's get to our charts here. you can see what i'm talking about here. this is the projection for the funds rated 2015, average year. it's gone up just a bit from 0.83 basis points to 1%.
this follows the fed. if you notice, the media was 75 to one. same thing the fed did last time around. take a look here. the propbgz is for july 2015. it's getting closer. july 2015 is the average date expected. expectations for the balance sheet. that's based on 4.2 trillion dollar balance sheet. this is a new question the last couple of months. i think it's an important one.
51% for 2014, 49% to 50%. take a look at 15 when it comes to those expecting the fed to be more hawkish or think the risk is there. 39%. a little bit more hawkish risk for 2015 right now. some of the comments we made. given giddis saying they will not raise interest rates until late 2015. growth, including jobs, too choppy in the month ahead. the fed should be tapering more quickly. they will liftoff. just so you know, 60% say the fed should taper at the current pace. the closer we get to normal levels of investment. guys, i'm back at 8:30 or so.
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welcome back to "squawk box" this morning. we have a couple things going on. comcast just announcing a series of deals with charter communications that will see it divest 3.9 million subscribers. the move will take place after the deal of its deal with time warner cable. they try to get under 30 million
subscribers. merck selling its consumer health care unit for $148 billion. it makes claritin. and a judge approved amr and us airways to merge the justice department had bought that deal, you remembering, saying it will result in higher airfares. >> you claim to have been in mexico. >> i said i was in mexico. and here i am in rome. >> but look how happy.
>> so thrilled. >> and the eyebrows. and that thing on your wrist. >> my black one. >> this is the orange one today. this is the black one. the fit bit he's wearing. >> we didn't catch you in rome. that is not you. >> i saw that over the weekend. i go, oh, my god. you lied to me. that's what i thought. wouldn't be the first time. you said you were staying at least on this continent and you didn't. >> how are the gold and energy markets faring? joining to us discuss this, frank holmes, ceo and cio of u.s. global investors. and matt smith from schneider electric. i talked to someone, was it our friend, what's his name? i'm slipping a little. peter schiff was it?
we're going to 5,000 because of the fed. >> i don't see those types of forecasts, joe. i believe 10% in gold is rebalancing each year. when you look at russia, the big issue is oil. they're the largest exporter. biggest source of foreign money is exporting energy to europe. they have been well-known to play games in the middle east to get the energy prices up because it helps their foreign exchange. >> if all you are going to do, frank, every time you come on, no matter what, own 10% and it's about oil, i'm just going to go to the oil guy. what about the two miners. why were they trying to get together? was business that bad? >> business is very challenging.
they could streamline to a billion dollars a year. to streamline the resource sector. >> yeah. you can deliver the alpha. anyway, don't -- isn't the fed old news? aren't we on the other side of the peak intervention or is there more to come? >> you mean for the price of gold? >> is there more to come -- haven't we gone past the peak of central bank intervention where you can expect $5,000 goal. are they starting to pull back at some point?
>> no, joe. new rules are coming out, like this factor over the irs is imposing new costs on the banking world. you're seeing many countries around the world have been cutting back in foreign reserves as being the dollar. and you have seen more bilateral trade agreements. every trade was done with u.s. dollars. now you are seeing transactions between rubles. between brazil's currency and remembe. an important trade. china was 55% of their reserves were in dollars, they are now down to 33%. it appears to be going to 20. >> yeah. it was peter schiff. last week, did you see that. he interviewed on the peter schiff show. i don't know what it was. he interviewed the bundy dude.
>> the guy out west? >> not al bundy. cliven bundy. he asked him to explain something. i think he basically said the same thing. anyway, let's get to matt. matt, you heard frank say it's all about oil. where are we at this point in time with the whole complex? >> we will find out today. i think they can't really do any wider sanctions than that. specifically because europe is so concerned any wider sanctions would be detrimentalto their economy. we're just going to continue to see this tight for tat. we start because of this sanctions coming through. >> so it is -- that's what it is keying off of. you know the summer driving season is coming up, matt.
if we ever have summer. >> neither here, joe. it's like monsoon season. what we are seeing on retail is $3.70 a gallon. we should be peaking any time soon. the reality is we will see prices average #$.50 for the rest of the year. but we are coming out of refinery maintenance season. we will be seeing more gasoline produced. hopefully that will keep it in check. >> matt, given the relationship that europe has with russia, is there any way that we're even in a position to talk them into what really needs to be done because they are so dependent on energy coming from russia? >> that's the deal. every time we talk about sanctions, joe, we never mention oil and gas sanctions because the relationship is so enter dependent. what we will get is some sort of
diplomacy somewhere along the line. it will take a certain amount of escalation for a breaking point for us to get there. >> they are saying -- i read both. i read russia is ready and we don't think russia will invade. flying their jets right in. they turn around and fly back out. >> intimidation. >> they are hoping to provoke and then they give an excuse. >> i don't know. if it happened, what would oil do then, matt? >> we would see prices spike if there was some sort of supply issue there. but i really don't think we would get to that point. >> all right. gentlemen, thank you. frank and matt. >> thanks, joe. >> happy investing. >> thanks, frank. when we come back, we will unveil another cnbc 25 first finalist. here is a hint for you. former banker turned philanthropist brooklyn.
tomorrow on "squawk box", it's the unveil of cnbc's first 25. top rebels, icons and leaders. the people who have had the greatest influence and cause the most disruption in business over the past 25 years. cnbc's tyler mathisen joins joe, becky and andrew for this very special event start agriculture the 7:00 a.m. eastern time. "squawk box" and the first 25 list only on cnbc, the world leader in business news. announcer: where can an investor be a name and not a number? scottrade. ron: i'm never alone with scottrade. i can always call or stop by my local office. they're nearby and ready to help. so when i have questions, i can talk to someone who knows exactly how i trade. because i don't trade like everybody.
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>> win or lose. of all the bankers, bankers turned policymakers, and wall street money spinners, sanford sandy weill assistance around as a deal maker, epic rule breaker, and "game change"er. >> he was the architect. he was the larger than life figure on wall street for decades. the seminal figure of the modern day wapbanker for a long time. >> fire men's fund, commercial correct, travelers, smith barney, shearson, solomon brothers, aetna. weill, either bought them, sold them or reshaped them on. >> sandy was a conscious mat deal maker. he knew how to ring savings out
of the office. >> he did have a vision of what financial supermarkets should look like. why that would be preferable to a stayed bank or insurance company. and he executed. >> the deal of this deal maker's lifetime, the 1998 $76 billion merger of weill's group and citigroup. >> in a basic way when you citi and travelers get together you did away with this law that in its essence prevented banks from underwriting corporate securities, although that was something they had been doing to a certain extent. it changed the landscape. >> he won a temporary waiver of the law. then in 1999 helped engineer its repeal. >> it forced everybody else to try to merge and get into the sort of larger than life
business. >> maybe too large as it turned out. although weill left citi as ceo as chairman earlier, when the financial crisis hit in 2008, no bank was hit harder. its size became its vulnerablity. take pairs saved it. >> it was the poster child for too big to fail. when you have an implicit government guarantee that something is not going to fail, you're not subject to the normal constraints of asset flows and everything else. and the whole system, the whole market doesn't become efficient anymore. >> when you have the government guarantee on deposits, there's an imbedded cushion against failure. so they can sometimes take more risks. in the creation of institutions like the one that sandy may ultimately know what happens. >> weill focuses mostly on
philanthropy, donating millions to his alma matter, cornell. he is a senior adviser on the citigroup. he reversed his opinion on the financial supermarket he helped design. >> have banks be deposit tankers. have banks make commercial loans and real estate loans. have banks do something that's not going to risk the tax payer dollars that's not going to be too big to fail. >> regrets, he's had a few. but the wall street legend did it his way. >> tomorrow, we'll be unveiling the entire list starting 7:00 a.m. eastern time. on wednesday, sandy will be joining us right here as a guest host as we continue this week long celebration of the cnbc first 25 list. a lot of people had a huge impact, some of which have been controversial.
we will be debating those as well. >> we are just arguing who is on and who is not on the list. we will talk about that in depth tomorrow. still to come this morning, a check on the markets and investment from who market pros and the charter deal on comcast. "squawk box" will be right back. [ grunting ]
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struck a deal to divest $3.9 billion. on the phone is craig moffett, founder of moffettnathanson. it is 7:49. this happened at 6:00. i'm not sure you have had enough time. have you? it's complicated. >> we started sharing it over the weekend. it was first reported by the financial times. we had at least a little run up. i'm here on the west coast for the cable show. forgive me if i'm a little bit bleary at this hour. >> just from the details got us a little bit bleary. can we start by saying charter and comcast get some of the things they wanted here? >> yeah. i hate the phrase win-win
because it's almost never true about a deal. but this may be one of the those rare deals that's a true win-win. charter wanted scale. they got that. it is roughly dowel their size. that's a lot of what they wanted to do. and i would suspect now it gives them the clarity of runway to go out and do some other deals as well. and for comcast, they have already raised their synergy target based on higher confidence now that they can cheap all the target they had expected. you will see both stocks react pretty well. >> i figure you have malone on one side. i don't think -- you can't put anything over on either side, can you? >> that's right. you have two very skilled
dealmakers. you have to remember that you are now starting to consolidate operationally in the hands of the two best operators in the business at comcast and rutledge at charter. they don't miss the fact that they reported subscriber reports. they grew video subscribers. it's been a long time since you have had any cable operator growing ub describers. now you have both saying their video subscriber base is getting bigger instead of smaller. >> in terms of valuation per subscriber they will be getting from charter, is it more or less than effectively what they are paying from time warner? >> on a sinner any adjusted business, comcast is pleased. they would say they are trading right now at 6.7 times ebitda
and on an adjusted basis, the assets they're buying from time warner are 6.4. this deal is a little over seven. they would say they are pleased with the prices they're getting. it's a little bit higher than they are trading. charter would say that with the tax benefits they can bring to this deal and the synergy they can get they feel it will be beneficial. >> do you think charter at this point is not -- they're not upset that the whole time warner didn't go their way. this is in terms of malone getting bigger and bigger. >> it's a pretty big consolation prize. there are still other fish in the sea that i think now you will see charter probably go after.
there are smaller ones like mediacom, sudden link. a reasonably large one in cox. though there is no reason to think cox would be for sale. it's hard to say individually whether any of the symptoms or operators are for sale. among that list i think there will be other things. >> does it offload debt oregon there other reasons to do it? >> it is related to taxation. it will start as a separate entity. charter will be able to up 49% after two years and have to wait another two years before they can buy the rest. all that is related to tax laws. >> can someone else come in later and try to buy the whole
thing? >> yes. in theory, there is no guarantee that charter gets to be the buyer. the board has three from charter, three from comcast and three independents. the independents would have to evaluate. i think you would have to assume is they would have the inside track for this. it obviously isn't a guarantee or else it would be considered a fail. >> what do you put the comcast deal going through with time warner now? >> i don't know. it makes it possible for the fcc to move forward with clarity to know with clarity where the symptoms are going. i have gone back in forth.
the trust issues raised by this case which from the doj is relatively novel. the fcc looks at this at public interest. i'm guessing they will say that their regulatory ambitions are actually better advanced by approving it and applying conditions than they are by rejecting it. >> does the net neutrality change anything? >> no, not really. cam cast came in saying they would agree to net neutrality. there's been quite a dust up from the fcc because it allows for prioritization for what people call the fast lane.
i don't see it as big change. >> all right. you have your own firm now, moffetnathanson. >> we are one of those small businesses that you always talk about what you get excited about. i'll tell you, i wish i had done it sooner. >> hester moffett was an anogram. i don't know whether moffettnathan. i'm trying to figure it out. craig, thank you. >> my partner michael nathanson is one of your contributors as well. >> so he is well healed. he has some scratch. thank you. see you later >> when we come back, pfizer making a freshman of astrazeneca. one of the details after this >> president obama turning up the heat on vladimir putin and investors in russia. new sanctions potentially
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astrazeneca. and g.e.'s plan to buy alstrom hits a bump. >> the fed in focus. a big two-day meeting. how are economists feeling about the taper and state of business? details just ahead. and we're on retail detail. big box retailers have been bruised and battered. the final hour of "squawk box" begins right now. ♪ i think it's going to be all right ♪ >> welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin who is back, rested. >> thank you. >> sun is not good for anyone. anyone says why aren't you tan say because i'm smart. >> you got a little bit.
>> i, like my sons, wear those shirts. >> that and 60 spf. >> that is ridiculous. because of your boobs or the sun? >> the sun. >> you can buy them so your boobs look good. >> do you have a safp snell. >> what do you mean a satchel? >> a man purse. murse. john carries one. looks like zach galifianakis. >> he believes in the fanny pack. >> it connected to you. >> in the front. futures up about 91 points. rough session on friday. in general, we have been trading higher. we got through that little
period. we were worried about what the 10-year was telling the us. we got back almost out. did not have a 10% correction. nbc universal parent comcast struck a deal with charter communications to divest 3.9 million subscribers in its deal to buy time warner cable. transfer is 1.4 million customers directly to charter for cash, over $7 million in cash. comcast said the move will improve the geographic presence of both. fills in holes where both wanted the entire area. comcast, in the process, is going to form a new independent publicly traded company. it will spin off to shareholders. the new company will be known as spinco. it will serve approximately 2.5
million comcast customers. when all the deals are concluded it will hold no ownership in spinco or charter. and have no role in managing. still has to be approved by federal regulators. the company says the value of all is $20 billion. if you put them altogether. hopefully you dvr'd the entire show. craig moffett, we just spoke to him. earlier we had rich greenfield on. you should be taping the show today. >> you should. both of them seem to think both companies come out ahead. >> which is not surprising given the guys that put it together. it is possible to do that whuf u these things. >> swap things so everybody gets a little something. >> right. >> let's tell but another deal this morning. pfizer going after astrazeneca in what could be the largest acquisition ever. seeking to renew discussions after offering nearly $100 billion to buy astrazeneca. he had approached the company back in january.
astrazeneca said it significantly undervalues the company and advises shareholders to take no action on pfizer. shares up in a big way. $83.20 a share at this point. you should know the date to watch is may 26th. that's the date of which pfizer has to make it known whether they will proceed with some type of bid or not. the company, pfizer that is, coming up with the uk takeover rules. they put a price tag on the company. but also saying that a large part of this is tax driven at some level because they have a lot of money overseas. pfizer, that is. they want to use it without bringing money back. the structure would be such it would be done through a uk company with lower taxes. unclear whether or not they would funnel money through that as well. the big issue is this morning. >> pfizer went up that day. it is up today. which is beard. the acquiring company went up
both days. >> valeant was up a lot. where are you on that? i read something over the weekend. terry keenan said it was front running. legal. but it has to be addressed. >> from a policy perspective, the idea that you can buy a company before -- but it's hard -- i don't like it. it doesn't look right to me. >> you saw what his response was. you're allowed to use inside information as long as the person giving it to you isn't doing something with their fiduciary responsibilities. >> right. what happened if cnbc has an agreement with bill ackman and says tomorrow we're going on some news. >> i went back to david and realize he did absolutely nothing wrong at all. >> according to berkshire it was
their own internal violation. >> do you think a stock is cheap? i'm buying it. you say i think this is really cheap. they decide to take it over. >> the distinction is if you're an active shareholder or any investor, you don't know he's behind. invariably it is a market moving event. or especially if you're bill ackman and you have a plan. it is a market moving event. the question is how do you deal with that? change the windows? perhaps you shouldn't have that 10-day window. >> they have been fighting this for a while. they would like to see the 10-day window shrunk into a smaller period of time. >> the question is, is that good for shareholders or not? is that good for the markets or not? to the extend that warren buffett combines at a price -- he would struggle, i would imagine. i would imagine make it much more -- for all of these guys.
the question is is it good or bad. are takeovers good or bad? that's the larger policy question. >> so back to pfizer just one second. >> yes. >> when you see redomiciled, would pfizer become a company? >> i don't think so. >> some people are making that point. remove itself. it would be the largest redomiciling ever and becoming a uk company. >> a new uk holding company that would not subject astrazeneca's nonu.s. profits to u.s. tax which would be in the best interest of the campaign company shareholders. >> it sounds like pfizer would still be based here. >> it doesn't suggest pfizer is moving. the question becomes when you have this other holding company how do you -- >> repatriate.
all of it points back to the fact that we have far too complicated a tax code. >> i was going to tell sorkin, if we lose pfizer to the uk because of our debt code, would that finally cause you to realize we need to fix this? >> i think so we have to fix it anyway. i do believe we have to fix it. it's not that i don't believe we have to fix it. >> it matters to me you what believe. >> the u.s. plans to slap new sanctions on russia as early as today. that will be targeting people and companies inside president putin's inner circle. the move aimed at punishing moscow for not living up to its agreement thus far to de-fuse the situation in ukraine. we asked about how the situation could play out in the global markets. >> if we do this to russia, russia will retaliate by its own sanctions disrupting the supply of energy to europe. >> so europe is caught in the
crunch on both of these situations. >> correct. we live in a global neighborhood. >> and that's why this decision is so hard. wh what. >> u.s. and european unions posted limited sanctions over moscow's an exation of crimea. the european plans to announce sanctions as early as today as well. >> tensions between russia and ukraine again sparking market fears. joining us is allison dean, senior adviser at varik asset manager. and portfolio manager at the hodges fund and hodges small cap funneled. i would like to ask both of you, any idea why the futures are 90 points up for the dow? craig, do you have any comments on that? >> not specifically. we have two days upstrong and then the opposite. i think it's more of the same. the algrithims are deciding
which way they go. we are hostage to that on a short-term basis. >> if you look at what's happening with earnings season, some numbers have been better than expected. what do you think this early in the season? >> it looks as if the trend is positive. at least tilting more positively. this merger activity points to kwfdz on the corporate level. we have been looking at corporations doing nothing and sitting on a lot of cash for years. enough we have over a trillion dollars of merger activity. so to me it points to the fact that ceos are feeling better about the global economic in the u.s. that combined with more bodes well except now we have this ukraine issue. there always seems to be some exception. >> the mma wrrbgs does that tell
you where we are in the bull market? why do you think executives are feeling more confident and what does this tell us about where we are on that trend? >> my sense is they are at the feeling better about the economic outlook. mma activity i feel tends to be good in the beginning. the beginning of the cycle seems to be the more creative rationally valued. and it is pointing towards the fact that they seem to be rationale that are created pretty immediately and intend to make sense structurally. maintaining market share. st continue to sustain growth. >> we see a lot of positive signs. we have our seven analysts that do about 2,500 company clutches every year. we don't go with any one single data points out there. we see a very optimistic terms.
margins are holding up well. there's a healthy mix of pessimism. we think we are in a stock picker's market. in the slow growth environments it's fairly easy to find the growth. the companies that are growing at a superior rate. >> let's talk about companies that you like. which would jump out at you? >> a couple areas. we like the energy area. we see some things. one of my favorites stocks there is hercules offshore trading at a very low multiple. we also like in link. midstream business. we should see a 20% grow there for the next five years, plus dividends. and there's a lot of industrial names. trinity industries, eagle materials, which trade at very low multiples and have we think peak earnings the next couple of years. below 10 times earnings.
there's a lot of opportunities. it's not obvious. but when you're doing the underlying research out there, there are names to look at. >> all right. want to thank you both for joining us today. >> pleasure. >> okay. all right. another big story we're following today, french president hollande meeting with jeff immelt. immelt said the meeting was open, friendly and productive. the french government is seek to go put the brakes on g.e.'s proposed $12 million plan and has asked siemens to come in and look at alternatives, keeping it a euro centric company. they warn g.e., a potential deal could face sanctions. he recorded alstrom ceo to the ministry immediately.
to explain why the company -- wife a company would negotiate without talking to him first about selling some of its assets. now a -- >> when in paris, if you have to go -- >> things are going so well with their private economy. siemens is proposing a cash deal and assets swap. siemens values it $14 billion to $15 billion. it would contribute part of its rail and other transportation businesses with alstom. then there would be two companies, one in energy and one in transportation. shares of alstom and shares on g.e. up. >> france and its lack of free markets, think about this g.e., a free market u.s.-based company wants to buy a french company. and by the way, live with all of
these restrictions. so we keep talking about taxes going this way. >> we already have 10,000 employees there for general electric. >> sorkin, do you know how much money g.e. has on the balance sheet? $87 billion. $85 billion. >> shoufp ovhow much is oversea? >> $55 billion. this is all screwed up because of the way things are right now. and also europe is improving. you know what i have visions of and a bad taste in my mouth? alliedsignal, honeywell and everything else. i don't like dealing with them. >> that was the eu. >> yeah, well, mario, monty, he's italian. seems european to me. in the last 10 years, though, g.e. has done 50 deals that have
been approved by the eu with a total value of $25 to $150 billion. they have joint ventures already in france. >> they are clearly willing to hold their nose on french politics. >> they are. they are. the deal in this country is probably not as bad as in france. coming up, president obama set to announce sanctions against russia. [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor...
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president obama will levy new sanctions on russian individuals and companies. joining us is founder and ceo of investment advisory firm. i thought this was yours. >> i thought so too. >> no, no, no. >> because i love you so much. >> no. >> i would like to bequeath -- >> i'll show you how it's done. since i know, i'm giving it to you. >> you're closer. >> this is airing our dirty laundry. this is not something we should do. thank you for coming in. i hesitate to say, tag-team you on this? >> i'm a hot potato here.
nobody wants to touch me. you of all people know how they do business. is this going nuclear? >> the only way to get him to stop doing what he's doing is to go after him and his money. all these little efforts to go after the guys around him -- >> are you saying we may go after you eventually? we don't have the fortitude to do that. >> what everyone understands, putin doesn't keep a lot of money in his own name. there's trustees that hold his money for him. the one sanctioned recently was gun vor. maybe more than 20. people who are on the rich list but not as rich as you think
because they are holding vladimir putin's money. >> how does he react, though? here you have a guy who has invaded ukraine. in the modern day he has invaded ukraine. we want him to stop. how do you get a guy to stop who has invaded a foreign country in this day in age? we could send troops down. i don't think anyone hosni intentionsis of doing that. what are your other options? wide trade sanctions, which you don't have to do with russia. because all the money is being held by putin and about 1,000 guys around him. if they care about money, that's an effective way of stopping them. >> how easy or hard is that to do? >> well, it's not that easy. none of the stuff is registered in putin's names. you don't know how much is
theirs and how much is his. >> how much are in banks we would have access to? >> any time there is a dollar payment from one russian crook to another russian crook it hits the us banking system for a second. it goes through the u.s. clearing bank. so the u.s. authorities, u.s. intelligence knows where every dollar payment has ever gone. now, have they actually started to investigate this stuff? i think they just started getting excited about the idea of sanctioning putin. the u.s. is like a super tanker. it takes 100 miles to change the course of the super tanker. but they are changing the course right now and going after putin and his money. >> if they do this and this was money stolen again, what is there to stop him from stealing -- >> nothing is stopping them. they're just going to steal and steal and steal. that's the whole point. if this guy is all about stealing -- this is different than the era of breshnev. he wasn't keeping it in the south of france and swiss banks.
so we now have a an angry government of russia doing all this stuff. but we have advantage because he seeps his money in the west. >> how much money is leaving russia? >> the official numbers are $50 billion in the first couple months of this year. i think it's probably a multiple of that. and so what i would say is anybody who hosni money in russia, westerner or oligarg, if they're smart, they would be getting their money out now. >> he wants everyone to go green, as you know, but where do you think they will go? >> in the next six months, as
putin invades ukraine, ukraine has a relatively weaker army than russia. what's their leverage? the pipeline. which means gas supplies could easily be disrupted. >> thank you. >> when we come back, stocks on the move this morning, including a gold deal gone bad. right now as we head to break, take a look at futures. dow futures up almost by triple digits. .ntury link provides rele it services like multi-layered security solution to keep your information safe & secure. century link. your link with what's next. with all the opinions about stocks out there, how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity.
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still to come, the latest cnbc ruts. and why investors should be kicking the tires of avis. >> take a look at the u.s. equity futures. dow futures up by 92.5 points above fair value. s&p up by nine. nasdaq up by 16. "squawk box" will be right back. ? we could save you a boatload! ♪ foghorn sounds loudly ♪ what's seattle's favorite noise? the puget sound! ♪ foghorn sounds loudly ♪ all right, never mind doesn't matter. this is a classic. what does an alien seamstress sew with? a space needle! ♪ foghorn sounds loudly continuously ♪ oh come off it captain! geico. fifteen minutes could save you fifteen percent or more on car insurance.
welcome back to "squawk box", everybody. let's take a look at the stocks to watch this this morning's trading. astrazeneca one of the morning's big gainers. the bid undervalues it and it is confident as an independent company. that stock up 16% this morning. forest labs is buying north carolina-based furiex. it comes as forest is itself is being acquired. forest says the deal will have no impact on the timing of the transaction. if you think there is a lot of m and a, there is. it puts us on scale for $3
billion on the year. lab corp. profits $1.51 a share. results were impacted significantly by severe weather. roper industries was 11 cents better than the street expected. revenue beating the street's forecast. stock, though, down by 1.8%. rival newmont mining informed them it has decided to terminate merger discussions. barrick gold up a half a percentage. >> remember mr. roper? >> yeah. >> who was that guy? >> the guy from -- >> then mr. ferley came in with the ascot.
norman fell. no one told me. did you see this dude? >> yes. >> physical therapist. not a doctor. not a doctor. $4.1 million salary. do they have that many hours in the day to do that physical therapy? it's all in brooklyn. brooklyn is happening. 4.1 million. >> did the ropers have their own show? >> they did. >> i don't think it lasted very long, though. >> no, unfortunately. just like hey larry didn't either. >> after threes company they went to two's a crowd. do you remember that? >> no. >> that didn't succeed either. >> john ritter, he was phenomenal. we lost him way too early". sling blade. love him. >> the eye thing. he had it also.
>> did he? >> yeah. i met him years ago. >> cnbc latest fed survey. he joins us now. steve? >> good morning and thank you. we have our first grades for janet yellen. see all the scribbling in here. we will come back. we graded four or five categories. leadership, bernanke gets an a. transparency, both get bs. communication, yellen a little bit below bernanke because of the flub she made in her first press conference. overall, monetary policy, b versus b plus. and the final grade here, b versus b minus. yellen got a few more as than bernanke ever got. however, she got a few ds as
well. is the fed clear? 64% say fed monetary policy is clear and prevalent. it has remained in the 60s right there. we will watch to see if this decline is a trend. 36% not clear and credible. some of the commentary. you know the notes that come along when your kid gets his report card. here are some of them. going forward, the fed needs to articulate a what if strategy. what do we do if it falls short? bob brusca said the fed needs to make its inflation target a real promise. finally, the exit strategy could be more difficult than the fix-it strategy. coming up at 10:00, the fed's views -- i'm sorry, the fed sraeur on t's survey.
for a good time call andrew. it's signed j.k. i don't know what could could mean. >> did you make that up? >> no. it says it right there. i'm not making it up. >> are there phone numbers? >> 867-5309. >> joe and andrew, together forever. >> that's andrew's phone number, 867-5309. >> jenny, jenny. >> andrew, who can i -- ♪ >> ♪ >> great song. tommy tutone. what's his name? >> i think it is tutone. ♪ jenny, jenny, who can i turn to ♪ >> what was the real point of this song? >> that number was dialed again and again in cities all over the
world. people had to change that number. two minutes left. do you have anything else? >> it's a baseline number. early days yet to grade yellen. should we do it now or not? >> pretty good number. >> pretty good numbers. >> do they give a woman lower grades in general? i think we want to watch for that. >> i think bernanke could have gotten lower grades than at the beginning of his tenure. >> i also think lynn reaser makes a good point. what yellen has to do is as hard as what bernanke had to do. bernanke had to in vent. but yellen has to -- i don't think we will fulfill your worst fears that we're in zero. >> no. >> it paid. are you bullish from here? >> no.
i haven't been bullish for five years on bonds. >> bonds, i get a lot of e-mails that bonds are outperforming stocks. >> they are this year. we're supposed to do bac. what happened? 11.9. revised first quarter. i don't know what any of that means. but we'll check it out. we'll go to break and come back. let's check out bac. >> it's down 2.3%. we will investigate. investigate before we invest. we should investigate before we invest. that is a good strategy. >> okay. >> i'm going to go see what it says on the wall. >> details right after the break. and you know the story. our next guest takes a similar approach. not too big. not too small.
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down a little. down 30 cents or so. they are lowering some of the ratios that they gave based on -- they miscalculated merrill lynch structured products during that takeover. as a result, the ratios they gave aren't as positive as they have been. they have to not do some of the capital stuff. >> they are suspended 2014 capital actions, including the $4 billion common stock patch authorization and the planned increase in the quarterly dividend from one cent to five cents. they are suspending the stock buyback and the increase in dividend. the company will expeditiously resubmit the data templates. they have to resubmit the new numbers and give them to the federal reserve and make sure they can go ahead and do what
they said they would be doing. that's why you see the stock down a little bit. >> they don't have to change their balance sheet or any of that stuff. >> the fed said no to a couple. >> because they put it back in the citi category. >> i don't know if it's material or because what they gave to the fed was not accurate that they are unable to do it and they don't feel confident. >> we have to ask permission based on the new numbers. >> right. >> and they're not going to get a lot -- the fed is not going to be happy whether it was a mistake. i'm not arguing it was intentional. people will suggest control issues. that's why it becomes a little more complicated i think. >> all right. "squawk box" platinum is expanding with a mid cap investor who limits holdings to 30 companies. co portfolio manager of the four store hennessey cornerstone mid cap. the fund has $4.8 billion under
management. good morning, brian. how many are you giving? are you giving us three? that's what you have to do to be a platinum portfolio person. what three are you looking at right now? >> i think the three we are looking at today is avis, huntington, ingalls and alaska airlines. >> really. okay. let's start with avis. i understand they try harder. >> really smart acquisitions with payless and zip car. they are managing the business really well. north american volumes are up. global volumes are up. revenue per day is up in north america and across the truck business. where we really find the opportunity is with that zip car acquisition. if they can roll out the sharing to a global platform, we think they have really great opportunities going down the line. >> you have done that, haven't you?
zip car? no. i love zip car. >> i haven't done it. i don't do it enough to make it worth while. >> you do uber. >> i do do uber. >> you just said do do. what's your next one? >> huntington ingalls is a ship builder. doing a nice job. there is some concern. we think the ship building side will be cushioned. they're doing a great job managing the underline business. doubled their purchase agreements. i think they are managing the business with a shareholder in mind. we really like companies that put that shareholder first. >> that's right. have you owned it all year? >> yes. >> really?
>> what's the third? >> alaska airlines. six years jp power award for service in a row. delta will move into their hub in seattle. they are refocusing on some other routes. but we really like the company. they've got their pensions paid off. they're fully debt free. going down the line, they will be an even stronger company. >> are they satisfied with their footprint right now? i always wondered about that. like hawaiian air. >> i think they are managing routes. to look into potentially places that they can see revenue and cutting out on the ones that don't make anymore sense. they have paired back in some of their markets and increasing in
others. delta will move in and take some of their share. they need to be profitable and expand their business. they have begun to do that. i think this will ultimately make them a stronger company. >> is neil your boss? >> yes, he's my boss. >> is he a benevolent boss? >> he is the greatest boss that you could ever possibly imagine. now he's ruined me for any other company. >> he's taking lessons from you, joe. >> he also does the dr. phil show. >> he does that. oprah hasn't had him on in a while. we are trying to push to get him back there. >> brian, thank you. >> thanks a lot, guys. have a great day. >> is there -- someone said in my ear that you use zipcopter? >> it's a new company. i'm invested because i own it.
it's almost like net jets. >> coming up, jim cramer. a wakeup call. find out what he will be watching when wall street opens for business. we'll be right back. >> tomorrow on "squawk box", it's the unveil of cnc's first 25. top rebels, icons and leaders. the people who have the greatest influence and cause the most disruption in business over the past 25 years. cnbc's tyler maths isen joins joe, becky and andrew for this very special event starting at 7:00 a.m. eastern time. "squawk box" and the first 25 list only on cnbc, the world leader in business deals. care for you. today, you can come to cleveland clinic
in ukraine. they say that this is russia's involvement is in disputable. there will be additional sanctions taken on two members of putin's circle. who are these other people? >> maybe, but they did say that they will get close to him to show him that some day they may go after him. it doesn't say who the individuals are. >> maybe they are going through the banks doing what they are talking about. >> jim cramer joins us now. comcast general electric pfizer. he is our m and a guy.
jim, where do you start with this? >> for some of these deals, it is tax motivated. they have so much money oversees. big international companies. they are doing these deals. and i know that pfizer has a lot of franchises that are coming off pa tent. they love these biy euyers wheny buy. >> is favor there today? >> yeah, i saw david. >> i am told that there is an as tra seneca release that would make pfizer dom syled iciled in? >> well, at least they didn't
pick ireland. >> all every congressman and senator. everything that they are trying to do is being from it terre ii. >> they are saying that it is a holding company but we are hearing on the other side that it may be the entire thing. >> that has been the pattern. david and i want to go to ireland and see what do they have that they can get around our taxes. >> ass txastra seneca is not a company but a good tax regime. >> do you think that ge prevails? >> i don't know.
it is a good deal if ge can get that power business. which is a fantastic gem. >> all right jim. we'll see you in a couple minutes. >> up next we do a little retail detail. many of the names down for the year. let's find out if we should be adding names like walmart and target. that is coming up around 9:30. stay with us. ♪
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welcome back. checking in on the retail sector. they are all over the map over the last year. walmart is flat. target is down about 13% with the troubles that they had there. macy's continues to be a bright spot. joining us right now. now the ceo of jay rogers and you look at this and you figure it real matters. performance matters how you run
things. they are the only national department store. they own the space and they have run the game. they are the only one out there that can do from the store to the store mobil you name it. walmart is doing the same by the way. they are moving quickly to do that as well. target is not moving fast into that. they are going to continue to lose ground. i think they focus too much on their grocery program. i think it is going to be hard unless you are tied to the fall. the traffic is not happening. what about the consumer overall? do you have to break it down?
>> february and march are awful. april has been great good. they rereport in may they will say it is a tough wraer. the first two weeks in may will be good. we have dpi rising an employment rising. i think we have a winner. phizer acknowledged that a combination would redom syl tic combined combineded group. >> that is actually mason. you know what pfizer makes too. it is the most important drug that people need to get to a certain age. >> lipitor. >> the blue pills. when you were running what?
>> when i was running finance at a leading rehe tailor. >> pfizer one of our best. it is a uk company. that is astonishing. >> thank you for coming in. make sure you join us tomorrow squawk on the street is next. >> good monday morning welcome to squawk on the street. three sessions left during the month of april. futures are showing a little bit of umph. we'll see pending home numbers in an hour. europe is behaving pretty